VIC State Budget: Stamp duty reductions for homes up to $1M

Discussion in 'Property Market Economics' started by Peter_Tersteeg, 24th Nov, 2020.

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  1. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The Victorian state budget has announced stamp duty reductions for homes under $1M.
    * New homes will attract a 50% waiver.
    * Established homes will get 25% off the stamp duty.

    The waivers will apply to contracts signed from 25/11/2020 (tomorrow) until 30/06/2021. It applies to all purchasers, not just first home buyers. I can't see anything idicating either way if it will apply to investment and owner occupied properties, or if it will apply to other entities such as companies, or if it applies to properties other than residential (commercial, rural, etc).

    It certainly does have the potential to boost property prices and will likely be an additional boost to construction of new housing. Probably an overall economic boost to the state given it will create some additional jobs in construction. It'll also allow people more flexibility to move around a little more.

    One prediction I'll make is that there will be a flurry of contracts signed in second quarter 2021. People will see the clock on this ticking down and be in a hurry to purchase before this ends. If you're going to sell in Victoria soon, May or June next year would be a good time.
     
  2. bumskins

    bumskins Well-Known Member

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    Looks like the maximum benefit for second hand is $13,750 if a $1M property?
     
  3. albanga

    albanga Well-Known Member

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    Double edged sword for me. I’m planning to move and purchase for around 800k so would save a few bob.

    However I’m planning to sell and my house would be around the 1mil mark but obviously I would like a touch over. Likely buyers would see even 10k over as 25k when you consider they lose the concession.
     
  4. OzziMelbourne

    OzziMelbourne Well-Known Member

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    Will this apply to house and land packages only if new? For example, if I’d like to buy a piece of land tomorrow and it settles by the end of 2021 and then I start building, I guess the discount for this land component would not apply, right?
     
  5. Owlet

    Owlet Well-Known Member

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    Can we rip up an existing contract and sign a new contract tomorrow?
     
  6. OzziMelbourne

    OzziMelbourne Well-Known Member

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    Only within a cooling off period I guess
     
  7. Owlet

    Owlet Well-Known Member

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    My conveyancer said no. Not happy :(
    It is frustrating never geting any handouts from the gov! :D;)
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    There will probably be anti-avoidance provisions to stop this.
     
  9. Frosty123

    Frosty123 Well-Known Member

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    Official Cash Rate dropped to almost 0% - Check
    Stimulus (Job Keeper, Seeker, Home Builder) - Check
    Banks providing a moratorium on home foreclosures - Check
    Stamp duty discounts - Check

    The government and banks sure have kept the dream alive :)
    I wonder whether the market will take a delay hit after all of this is over, or if there's more 'intervention' to come.
    It may to the trick until international borders are re-opened...
     
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  10. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The information I've seen so far indicates that if you sign the contract tomorrow, you'd get some sort of stamp duty reduction.

    You might only get the 25% reduction because land isn't a new home and there's no stamp duty on what you eventually build.

    You might get the 50% reduction because you're building a new home. I haven't seen any clarification on that yet.
     
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  11. Dishala

    Dishala Well-Known Member

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    Peter what are your thoughts on the prices at the moment with the stamp duty concession ending soon? Would it be a better time to buy in late July-August?
     
  12. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    That's a great question. The end of the stamp duty reduction will take some of the urgency out of the market, but overall I doubt it will the thing that stops the boom in Victoria.
     

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